Natural gas production from the Dragon field offshore Venezuela could start within the next two years, reported Reuters, citing Trinidad and Tobago officials.

This development follows the signing of a 30-year licence agreement between Venezuela and Trinidad.

It grants Shell and Trinidad and Tobago’s National Gas Company (NGC) rights to produce and export gas to Trinidad.

The final investment decision for the project is yet to be made.

In January, the US authorised the project, and the licence was awarded on 21 December 2023 after months of negotiations and multiple failed attempts for joint offshore gas development.

According to Trinidad’s Energy Minister Stuart Young, the Dragon and Manatee gas projects, the latter located in Trinidad’s waters, are expected to contribute up to one trillion cubic feet (tcf) of gas in their first phase.

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By GlobalData

Under the newly granted Venezuelan licence, an initial output of 185 million cubic feet per day of gas will be sent to Trinidad for production of liquified natural gas and petrochemicals.

Trinidad is seeking to tap into Venezuela’s substantial gas reserves as its own production declines, while Venezuela is in search of new revenue streams from exports.

During a press conference, Trinidad’s Prime Minister Keith Rowley said: “What we have done is to find additional resources, and fortunately, we have been able to get an agreement with the government of Venezuela.”

Shell will operate the Dragon project and an 18-km pipeline will connect Dragon to its Hibiscus platform in Trinidad.

The Dragon gas field is thought to contain up to 4.2 tcf of gas.

Venezuelan state-owned oil and gas company Petroleos de Venezuela (PDVSA) discovered Dragon and three nearby offshore gas fields, and its reserves were verified over a decade back.

PDVSA started constructing a gas line to the coast of Venezuela, erected some infrastructure, and conducted production tests.

However, the project never saw the light of day due to lack of funding, partner issues, and US sanctions.